Weather Index Based Insurance for Smallholders

About

Syngenta Foundation for Sustainable Agriculture (SFSA) under its Agricultural Insurance Solutions (AIS) division, offers weather based insurance, to helps growers protect their investment in quality inputs, repay loans even if bad weather damages their crops, and replant at once when germination fails because of irregular rains after planting. SFSA uses state-of-the-art climate and crop models, efficient processing of claims by insurers, and a record of timely pay-outs to underpin a reputation for lean parametric solutions that do not require loss adjustment in the field.

Weather insurance enables farmers to invest, and for this and other reasons is also of interest to governments, donors, international organizations, NGOs working in agriculture, and the agribusiness sector, i.e., input and service companies, commodity off-takers, and financial institutions offering value chain financing and loans to farmers.

Capability and features

Agricultural input companies put a registration card with a unique code in each bag of seed or fertilizer. When a farmers opens the bag at the time of planting, they find the card and follows its instructions on sending an SMS for registration. From this SMS, SFSA knows the farmer’s location and can monitor the rainfall using satellites. The premiums are paid by the input company; while payouts to the farmers are done via mobile money transfer.

SFSA offers smallholders in Asia and Africa a viable tech-based solution using automated weather stations and satellite imagery to monitor crop losses through weather indices developed. The solution solves both the affordability and distribution challenges (through eWallet) that agricultural insurance faces in reaching smallholders. Basic Financial Literacy training are also taken up as a part of the capacity building section of the program.

Progress to date

SFSA has worked with over 2,000,000 farmers across Africa and Asia.Their insurance programs in Bangladesh are set to impact at least 230,000 smallholders by 2021.

SFSA is working to improve the livelihood of end users by creating an application called the Resilience Engine. It is an IT Platform that automates agri-insurance business operation processes and will incorporate all activities including weather database management, pricing process, data collection, mobile phone integration, monitoring and evaluation. The application will also aide in the capacity building process by hosting high quality content for training purposes.